Consumer Proposal
Important Differences Between a Consumer Proposal and Personal Bankruptcy
| Consumer Proposal | Bankruptcy | |
|---|---|---|
| Cost | Fixed monthly amount for term of the proposal. | Can vary month to month depending on your income (surplus income). The more you earn the more you pay. |
| Length | Up to 5 years (60 months) | 9 months: no SI or prior bankruptcy 21 months: SI and no priro bankruptcy 24 months: no SI with a prior bankruptcy 36 months: SI and a prior bankruptcy |
| Impact on Credit Report | R7. Indicates a settlement with creditors. Lesser of: 3 years after final payment or 6 years from filing (Equifax) | R9. The lowest rating possible (indicates the debt is written off). Reported for 6 to 14 years after discharge date. |
| Duties | Make monthly proposal payments. Attend two credit counselling sessions. | Make monthly payments to Trustee. Report monthly budget with proof of income. Provide tax documents to trustee. Attend two credit counselling sessions. |
| Other | Will know up front if creditors will accept proposal offer. | Creditors could oppose discharge at the end. |